1983 (12) TMI 305 - AT - Central Excise

Summary

Issues:
1. Whether goods manufactured before a notification imposing duty are liable for excise duty at the time of removal?
2. Whether the exemption at the time of manufacture absolves the liability for excise duty at the time of removal?

Analysis:
The case involved a revision application that was treated as an appeal against an order passed by the Appellate Collector of Central Excise, New Delhi. The dispute arose regarding the liability of excise duty on goods manufactured before a specific notification imposing duty. The appellants, who manufactured cotton fabrics, argued that the goods produced during a certain period were duty-exempt under a notification issued on 18-6-1977. However, due to procedural delays, the goods were cleared after a subsequent notification on 15-7-1977, making them liable for duty. The main contention was whether the liability for excise duty should be determined at the time of manufacture or at the time of removal from the factory.

The appellants relied on a previous court decision where goods fully exempt from excise duty at the time of manufacture were held not liable for duty upon removal post-withdrawal of exemption. Conversely, the Respondent argued that duty liability should be based on the removal date, not the manufacture date, citing various legal precedents supporting this view.

The Tribunal emphasized that excise duty liability is triggered at the time of actual removal of goods from the factory, as per Section 3 and relevant rules. It was clarified that even if goods were exempt from duty at the time of manufacture, the duty becomes exigible at the time of removal. The Tribunal distinguished cases where exemption notifications did not absolve goods from excisability. The judgment highlighted that the date of removal is crucial for determining duty liability, and a 'Nil' assessment is valid under the Central Excise Act. The Tribunal concluded that the goods, though manufactured before the duty notification, were liable for duty upon removal after the notification date, thus dismissing the appeal.

In conclusion, the Tribunal upheld the duty liability on goods cleared post-notification, emphasizing the significance of the removal date for determining excise duty liability, even if the goods were exempt at the time of manufacture. The decision underscores the legal principle that excise duty is leviable at the point of removal from the factory, as per relevant statutory provisions and legal precedents cited during the proceedings.